LME aluminium recovered some losses yesterday to close at US$1,792/t overnight; SHFE consolidates after a bullish phase

The US dollar strengthened on Wednesday after the Federal Reserve cut interest rates as expected, but failed to signal more easing in 2019. LME base metals closed mixed on Wednesday with aluminium dipping 0.06%. SHFE base metals performed similarly overnight and aluminium lost 0.5%.

Three-month LME aluminium rallied to an intraday high of US$1,780.5 per tonne, before it eased to finish the trading day a tad lower at US$1,792 per tonne. LME aluminium is expected to hover between US$1,770-1,800 per tonne today, with upside potential hampered by a firm US dollar.

As on September 18, Wednesday, LME aluminium cash (bid) price stood at US$ 1750.50 per tonne, LME official settlement price stands at US$ 1751 per tonne; 3-months bid price stands at US$ 1781 per tonne, 3-months offer price is US$ 1782 per tonne; Dec 20 bid price stands at US$ 1848 per tonne, and Dec 20 offer price stands at US$ 1853 per tonne.

The LME aluminium opening stock dropped to 904175 tonnes. Live Warrants totalled at 701275 tonnes, and Cancelled Warrants were 202900 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1791 per tonne.

SME and SHFE Aluminium Price Trend

Departing longs weighed on the most-liquid SHFE November contract, which ended down 0.25% at RMB 14,215 per tonne, the third consecutive trading day of declines. Open interest decreased 3,210 lots to 258,000 lots. The backwardation structure is expected to continue in the short term. The unwinding of long positions depressed the contract to a five-week low of RMB 14,095 per tonne overnight, before the contract clawed back some losses to end 0.46% weaker at RMB 14,185 per tonne. SHFE aluminium is expected to move between RMB 14,050-14,200 per tonne today. Spot premiums are seen at RMB 20-40 per tonne over the 1910 contract.